Afya and Yduqs mark the beginning of a new stage in the competition for medical schools.

This week, the merger of Afya and Yduqs was announced, forming the biggest medical education company in the country amid a shift in the sector towards growth through mergers and acquisitions of established institutions, following a decade of rapid expansion in new courses.

The merger, subject to approval from regulatory authorities, would result in a joint venture comprising 50 medical schools, 38,000 students, and 5,900 annual openings. This represents 17% of the total vacancies at private medical colleges in Brazil.

The company brings together a specialized medical company with one of the country’s largest higher education groups. Afya’s business is focused on medical education and includes 32 colleges located throughout the country.

Yduqs operates in various education sectors and consolidates its medical programs under IDOMED, which currently has 19 schools nationwide, including brands such as Stacio, FAMEAC, and UniFacid.

The move creates a significant gap for other major players in the market, including Ânima, Educational Being, South Cruise, and Cogna. Ânima, which owns colleges like Anhembi Morumbi, São Judas, and UniSul, holds the second largest share of the private course market at 5%.

Afya and Yduqs will expand their business geographically by offering medical courses in a total of 18 states, compared to the current six states where they both have faculties.

Afya faced a setback in its expansion plans when the government canceled an agreement to open 1,400 medical places as part of More Doctors III. This decision came after a broader review of medical education quality in the country.

The competition for creating new classes

Major education groups in the country highly value the medical field due to the high tuition fees and lengthy course duration, which result in significant profitability for each student. On average, a student spends around R $ 800,000 during their time in medical school, as reported by Semesp, an industry organization.

The More Doctors initiative, established by the government in 2013, sped up this trend by encouraging the establishment of medical courses and private facilities in areas with limited healthcare services.

Also make sure to read

• The surge in legal actions against health insurance companies is driven by various factors in the business world.
• Junior Seripieri at Amil has already settled the business, and now the focus is on generating more profit.

The annual medical job openings in the country increased significantly from 16.4 thousand in 2010 to 67.8 thousand in 2024, marking a 313% surge.

The pursuit of additional employment opportunities decelerated in 2018 due to the government halting the introduction of new programs. The Ministry of Education (MEC) indicated the need to reassess the conditions and standards of this growth.

The suspension resulted in many faculties seeking legal action to offer courses without government authorization, leading to an increase in legal disputes to generate employment opportunities.

This year, the government implemented stricter measures, with 107 out of 351 medical courses performing poorly in the initial Enamed assessment, prompting the MEC to impose restrictions on underperforming courses.

Acquisition Pathway

Large education organizations are now focusing more on faculties with approved medical programs for acquisition, as it enables them to add existing vacancies instead of waiting for new authorization from the MEC.

Afya acquired a healthcare institution in Salvador for R$ 620.8 million in 2024, allowing for 300 annual vacancies. In the subsequent year, the company purchased FUNIC in Contagem for R$ 100 million, which had 60 approved vacancies.

The Educational Being, which owns colleges such as UNINASSAU and UNAMA, acquired three institutions between 2020 and 2022, increasing its medical student capacity from 268 to 521.

Cogna, the company that owns Anhanguera, resumed making acquisitions in 2025 after a six-year break from purchasing colleges. It acquired the Faculty of Medicine of Dourados for R $ 54.4 million, which had 60 authorized spots.

The test for focus

The merger of Afya and Yduqs represents a significant step forward in the industry’s M&A strategy. The companies will need to gain approval from Cade, an agency that assesses competition impacts.

Some cities may have a level of concentration that warrants attention, as indicated by JP Morgan’s analysis.

Afya focuses most of its resources in the northern and northeastern regions, but also has a significant presence in Minas Gerais and Rio de Janeiro.

Yduqs is also well-established in the Northeast, particularly in Ceará, and has a significant presence in Rio.

The merging of the two networks in certain cities will lead to a significant share of the market being dominated by Afya and Yduqs. In Ji-Paraná, Rondônia, they will control all private medical facilities, while in Teresina and Rio de Janeiro, they will have a majority of 53% and 48%, respectively.

JP Morgan believes that Cade might need to sell off universities in order to authorize the merger.

Many medical students relocate to urban areas for their studies, which can help distribute the academic competition across different cities and reduce concentration in one specific location.

The rivals

Cade may require Afya and Yduqs to divest certain assets, which could reinvigorate the acquisition market.

Itaú BBA identifies Cogna and Cruzeiro do Sul as the top contenders for these acquisitions due to their stronger financial abilities, while Ânima and Being Educational are currently in different situations.

Ânima is continuing to integrate the acquisition of FMU, while also focusing on expanding its presence in the North and Northeast regions through the opening of new positions and the growth of existing facilities.

The merger may also compel competitors to enhance the quality and design of their courses. According to Itaú BBA’s assessment, the expanded size of the new entity enhances its capacity to invest in student recruitment, brand strength, and the development of digital tools for education and medical training.

It is positive news during a period when the industry is experiencing increased emphasis on the quality of the courses.

The positive development arrives when the quality of medical training is being questioned. This year, the MEC started penalizing courses with poor results based on students’ performance in Enamed, leading to consequences like decreased spots and halting of new admissions. Although the sanctions were initially halted by the courts, they were reinstated in August.

Enamed will have a greater presence in universities next year, with exams held twice annually to assess fourth-year medical students earlier in their program.